Anatomy of Best States for Business
The factors underlying the rankings on each of the six broad categories are identified below.
Business Costs
- Moody’s Analytics “Cost of Doing Business” index (labor, energy and tax costs)
- An index from the Tax Foundation’s Location Matters.
Labor Supply
- College attainment
- High school attainment
- Net migration over the past five years
- Projected population growth over the next five years
- Percentage of the workforce represented by a union
- Percent of the population between 25 and 34 years of age
Regulatory Environment
- Regulatory component of the Mercatus Center’s “Freedom in the 50 States” (which includes labor regulations, health insurance mandates, occupational licensing, right-to-work laws, and other regulations), where less regulation is better
- Index of tax incentives and economic development efforts from Pollina Corporate Real Estate
- Moody’s general obligation bond rating
- Transportation infrastructure
- Laws that protect people from employment discrimination based on gender identity (a positive factor)
- U.S. Chamber of Commerce measure of legal climate for business
- State fiscal health from the Mercatus Center
Economic Climate
- Average annual growth in income over past five years
- Average annual job growth over past five years
- Average annual growth in GSP over the past five years
- Average unemployment rate over the past five years
- Average unemployment rate in 2016
- Number of large firm headquarters in the state (from the 1,000 largest firms by revenue)
Growth Prospects
- Forecast of job growth over the next five years from Moody’s Analytics
- Forecast of income growth
- Forecast of Gross State Product growth
- EMSI’s job forecast
- Venture capital investments from Pricewaterhousecoopers and Thomson Reuters
- Startup activity as measured by Kauffman Foundation
Quality of Life
- Cost of living from Moody’s Analytics
- School test performance
- Crime rates
- Mean temperature
- Number of four year colleges ranked highly by Forbes’ annual college rankings
- Index of cultural and recreational opportunities from Sperling
- Commute times
- Air pollution
- Primary care physicians from United Health Foundation